FCA/Whistleblower

13. Whistleblower/False Claims Act Disclosures and Disclosure Statements

Although the word “disclosure” is used routinely in the FCA world, you need to know that it has two or more distinct meanings.

The FCA says, “A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government . . . .” (Commonly referred to as the “second disclosure.”) While this is one kind of “disclosure,” it is probably not the kind of disclosure you will hear discussed in connection with your whistleblower case.

More likely than not, what you will hear discussed is that provision of the FCA which says that a person with independent knowledge who “has voluntarily disclosed to the Government the information on which allegations or transactions in a claim are based.” (Commonly referred to as the “pre-filing disclosure.”) Such a person is defined as an “original source” and an exception to the public disclosure bar. To keep from confusing these two distinct meanings of this word, it may be helpful to note that one is present tense in that it may be contemporaneously served with the complaint. The other disclosure is past tense, in that one “has voluntarily disclosed . . . .” In this case, if one discloses contemporaneously with filing the complaint, it’s probably too late.

As confusing as the above description may seem, let me assure you that it gets even worse.

Good lawyers, using best practices, commonly provide the Justice Department with extensive and detailed “disclosure statements” setting out in detail entire factual and legal underpinnings of a case. This is usually done, not only to satisfy the pre-filing disclosure requirements but also for practical and political reasons. Remember, the Justice Department, during the seal period, will be “grading the papers” by deciding whether it will intervene in your case or decline to participate. So, these shrewd lawyers use the disclosure statement as a means of beginning to “make friends”with the Justice Department lawyers who will have an outsized role in deciding how your case will be treated. Additionally, the disclosure statement is a way of exhibiting “good manners.” Remember, your qui tam case does not belong to you. It belongs to the United States. Good manners dictate that you will start sharing information about it with the government, the rightful owner, as soon as possible.

So, you can see, in addition to the two distinct statutory meanings of this word, there are multiple practical, political, and strategic implication for each of its uses.